Friday, November 2, 2007

A: Unfortunately, cigars were afforded special treatment in the budget. The budget specifies that no cigar can be taxed more than 50¢. Sounds to me like a bunch of cigar-smoking legislators wrote that one for themselves.

What this basically means is that a $10 cigar could be taxed at the same amount as a $28 cigar. (A $10 cigar would be $10.50 with tax and a $28 cigar would be $28.50 with tax.) The 50¢cap essentially prevents the state from collecting its fair share of taxes on more expensive cigars. As the price of the cigar increases, the percentage-of-price tax collected decreases. Doesn't seem very fair.